ITO, Ward 2(1), Jalgaon v. M/s. Manas Developers, Bhusawal

ITA 883/PUN/2013 | 2009-2010
Pronouncement Date: 26-11-2014 | Result: Dismissed

Appeal Details

RSA Number 88324514 RSA 2013
Assessee PAN AAMFM1444J
Bench Pune
Appeal Number ITA 883/PUN/2013
Duration Of Justice 1 year(s) 7 month(s) 7 day(s)
Appellant ITO, Ward 2(1), Jalgaon
Respondent M/s. Manas Developers, Bhusawal
Appeal Type Income Tax Appeal
Pronouncement Date 26-11-2014
Appeal Filed By Department
Order Result Dismissed
Bench Allotted B
Tribunal Order Date 26-11-2014
Date Of Final Hearing 05-11-2014
Next Hearing Date 05-11-2014
Assessment Year 2009-2010
Appeal Filed On 18-04-2013
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH B PUNE BEFORE SHRI G.S. PANNU ACCOUNTANT MEMBER AND SHRI R.S. PADVEKAR JUDICIAL MEMBER ITA NO.883/PN/2013 (ASSESSMENT YEAR : 2009-10) INCOME TAX OFFICER WARD 2(1) JALGAON. . APPELLANT VS. M/S MANAS DEVELOPERS C/O COLOUR STOP KHADKA ROAD BHUSAWAL DIST. JALGAON. PAN : AAMFM1444J . RESPONDENT DEPARTMENT BY : SHRI MAZHAR AKRAM ASSESSEE BY : NONE (WRITTEN SUBMISSIONS) DATE OF HEARING : 05-11-2014 DATE OF PRONOUNCEMENT : 26-11-2014 ORDER PER G. S. PANNU AM THE CAPTIONED APPEAL BY THE REVENUE IS DIRECTED AGA INST AN ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS)-II NASHIK DATED 18.02.2013 WHICH IN TURN HAS ARISEN FROM AN ORDER DATED 12.1 2.2011 PASSED BY THE ASSESSING OFFICER U/S 143(3) OF THE INCOME-TAX ACT 1961 (IN SHORT THE ACT) PERTAINING TO THE ASSESSMENT YEAR 2009-10. 2. IN THIS APPEAL REVENUE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL :- 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE THE CIT(A) ERRED IN ALLOWING THE DEDUCTION U/S 80IB(10) WITHOUT APPRECI ATING THE FOLLOWING FACTS OF THE CASE. I) THAT THE LAND IS IN THE NAME OF THE PARTNERS AND NOT IN THE NAME OF THE FIRM. II) THAT THE PROJECT AS A WHOLE HAS NOT BEEN APPROV ED BY THE LOCAL AUTHORITY. III) THAT THE COMPLETION CERTIFICATE FROM LOCAL AUT HORITY HAS NOT BEEN OBTAINED TILL 27/2/2009. 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E THE ORDER OF THE CIT(A) BE CANCELLED AND THAT OF THE A.O. BE RESTORE D. ITA NO.883/PN/2013 3. AT THE TIME OF HEARING NONE APPEARED ON BEHALF OF THE RESPONDENT- ASSESSEE INSPITE OF SERVICE OF NOTICE WHEREAS THE L EARNED DEPARTMENTAL REPRESENTATIVE SHRI MAZHAR AKRAM APPEARED ON BEHAL F OF THE APPELLANT- REVENUE. HOWEVER WRITTEN SUBMISSIONS HAVE BEEN FU RNISHED ON BEHALF OF THE RESPONDENT-ASSESSEE WHICH HAVE BEEN DULY CONSIDERE D. 4. IN THE WRITTEN SUBMISSIONS IT HAS BEEN POINTED OUT THAT SIMILAR ISSUE IN ASSESSEES OWN CASE FOR THE ASSESSMENT YEAR 2007-08 WAS DECIDED BY THE PUNE BENCH OF THE TRIBUNAL VIDE ITA NO.1107/PN/2011 DATED 30.09.2013 IN FAVOUR OF THE ASSESSEE. THE OPERATIVE PART OF THE ORDER OF THE TRIBUNAL DATED 30.09.2013 (SUPRA) READS AS UNDER :- 2.1 FACTS OF THE CASE IN BRIEF ARE THAT THE ASSESS EE IS A PARTNERSHIP FIRM FORMED ON 01-05-2005 CONSISTING OF 2 PARTNERS NAMELY SRI NARESH KUMAR KANHAIYALAL AND SHAIK HUSNODDIN BOTH RESIDENTS OF BHUSAWAL AND ASSESSED TO INCOME TAX. THE FIRM IS CARRYING ON THE BUSINESS O F DEVELOPING LANDS CONSTRUCTION OF HOUSES AND SALE OF THE SAME. THE A SSESSEE FILED ITS RETURN OF INCOME ON 13-10-2007 DECLARING NIL TAXABLE INCOME A FTER CLAIMING DEDUCTION U/S.80IB(10) OF RS.32 72 308/-. DURING THE COURSE OF ASSESSMENT PROCEEDINGS THE ASSESSING OFFICER NOTED THAT THE CLAIM OF THE A SSESSEE FOR DEDUCTION U/S.80IB(10) IS NOT ALLOWABLE FOR THE FOLLOWING REA SONS : I) THE LAND IS IN THE NAME OF THE PARTNERS AND NOT IN THE NAME OF FIRM . THE AO DISCUSSED THE PURCHASE DEED OF THE AGRICULTU RAL LAND AND ALSO THE SALE DEED OF RESIDENTIAL UNITS WHICH CONTAIN ON LY THE NAME OF PARTNERS AS BUYERS AT THE TIME OF PURCHASE AND AS SELLERS AT THE TIME OF EXECUTION OF SALE DEED. THE AO ALSO DISCUSSED THE ' COMMENCEMENT CERTIFICATE' AND ALSO THE COMPLETION CERTIFICATE WH ICH ARE ALSO IN THE NAME OF PARTNERS AND NOT IN THE NAME OF FIRM. II) THE PROJECT AS A WHOLE HAS NOT BEEN APPROVED BY THE LOCAL AUTHORITY. THE LOCAL AUTHORITY HAS APPROVED THE PLAN IN THE NA ME OF PARTNERS AND NOT IN THE NAME OF THE FIRM THE APPROVAL HAS NOT B EEN TAKEN FOR THE ENTIRE PROJECT BUT FOR INDIVIDUAL UNITS SEPARATELY. III) ONE OF THE UNITS SOLD TO MR RAJKUMAR PARWANI I S IN EXCESS OF 1500 SQFT.: THE AO RECORDED THE STATEMENT OF RAJKUMAR PARWANI W HEREIN HE HAS STATED THAT HE HAS PURCHASED ONE UNIT HAVING BUILT UP AREA OF 3000 SQ.FT AND ALSO STATED THAT PLAN WAS AMENDED AT THE FOUNDA TION LEVEL AND ALSO FILED A COPY OF AN APPROVED VALUER SHRI ASHOK DAHAD OF THE LAYOUT PLAN. IV) THE COMPLETION CERTIFICATE FROM LOCAL AU THORITY HAS NOT BEEN OBTAINED TILL 27/02/2009 : ITA NO.883/PN/2013 THE AO MADE ENQUIRIES WITH CHIEF OFFICER MUNICIPAL COUNCIL BHUSAWAL AND THE CHIEF OFFICER VIDE HIS LETTER DATED 27/02/2 009 STATED THAT NO COMPLETION CERTIFICATE HAS BEEN ISSUED BY THE COUNC IL TO THE CONSTRUCTION IN PLOT NO 8/27/53 & 58 AT SURVEY NO 110/2A+2B+2C+1 11/3A/1 OF KANDARI SHIVAR BHUSAWAL. THE AO STATED THAT THE AS SESSEE HAS FILED SEPARATE COMPLETION LETTERS IN RESPECT OF EACH UNIT BY THE MUNICIPAL COUNCIL BHUSAWAL DATED 27/08/2009. THE AO THUS HEL D THAT THE APPELLANT SOLD THE UNITS BEFORE THE COMPLETION CERT IFICATES ISSUED BY THE LOCAL AUTHORITY. V) THE PAMPHLET [BROUCHURE] OF THE PROJECT SH OWS THE PLANNED INDEPENDENT BUNGLOWS HAVING BUILT UP AREA OF 1752 S Q.FT.: THE AO REFERRED TO THE BROCHURE PRINTED BY THE APPE LLANT FIRM AND THUS CAME TO THE CONCLUSION THAT THE APPELLANT HAS BUILT ROW HOUSES EXCEEDING 1500 SQ.FT. 2.2 REJECTING THE VARIOUS EXPLANATIONS GIVEN BY THE ASSESSEE AND DISTINGUISHING THE DECISIONS CITED BEFORE HIM THE A SSESSING OFFICER REJECTED THE CLAIM OF DEDUCTION U/S.80IB(10) AMOUNTING TO RS .32 72 308/- ON ACCOUNT OF THE REASONS MENTIONED ABOVE. 3. BEFORE THE CIT(A) IT WAS SUBMITTED BY THE ASSES SEE THAT AGRICULTURAL LAND WAS TRANSFERRED TO THE FIRM IN AY 2006-2007 AND THE SAID ISSUE WAS ALREADY RAISED BY THE AO'S PREDECESSOR IN THE ASSESSMENT PROCEEDING U/S.143(3) OF AY 2006-2007 AND THE ASSES SEES REPLY DATED 28/08/2008 HAS BEEN ACCEPTED BY HIS PREDECESSOR AND WHICH WAS ALREADY ON THE RECORD OF THE AO. FOR A.Y. 2006-2007 THE RETUR NED INCOME WAS RS. NIL AND THE ASSESSED INCOME U/S 143 (3) WAS ALSO RS. NI L. IT WAS FURTHER SUBMITTED THAT THE AGRICULTURAL LAND ADMEASURING 2H 53R (AROUND 6.325 ACRES) WITHIN BHUSAWAL MUNICIPAL LIMITS WAS PURCHASED IN T HE NAME OF NARESHKUMAR K. SADEJA AND SHAIKH HUSNODDIN ON 25-04-2005 AS CO- OWNERS. THE FIRM WAS FORMED ON 01-05-2005 WHEREIN THE SAID AGRICULTURAL LAND WAS BROUGHT IN BY BOTH THE PARTNERS AS THEIR CONTRIBUTION WHICH HAS B EEN CREDITED TOWARDS THEIR RESPECTIVE CAPITAL. THEREAFTER ALL EXPENSES RELATIN G TO THE CONVERSION OF THE SAID AGRICULTURAL LAND INTO NON-AGRICULTURAL LAND LAY OUT EXPENDITURE NAZRANA MUNICIPAL DEVELOPMENT FEES ETC. WAS BORNE BY THE FI RM. THE ASSESSEE RELIED ON SECTION 45(3) OF THE INCOME TAX ACT 1961 RELATI NG TO ASSETS BROUGHT BY THE PARTNERS. THE PHOTOCOPY OF AGREEMENT BETWEEN THE PA RTNERS AND THE FIRM RELATING TO TRANSFER OF LAND TO FIRM WAS ALSO SUBMI TTED TO THE AO STATING THAT THE CONVEYANCE DEED WAS NOT REGISTERED IN THE FIRM' S NAME BECAUSE IT WAS NOT-NEEDED AS THE SAME 2 CO-OWNERS BECAME THE PARTN ERS IN THE FIRM IN THE SAME PROFIT SHARING RATIO. IT WAS STATED THAT CONVE YANCE DEED WAS NOT NECESSARY. THE ASSESSEE FURTHER STATED THAT ONE OF THE PARTNERS NAMELY SHAIKH HUSNODDIN'S CASE WAS ALSO ASSESSED U/S 143(3) FOR A Y 2006-07 WHEREIN THE FACTS OF HIM TRANSFERRING THE LAND TO FIRM WAS ALSO MENTIONED AND THE SAID TRANSFER OF IMMOVABLE PROPERTY HAS ALSO BEEN ACCEPT ED BY THE DEPARTMENT. RELYING ON SECTION 45(3) THE ASSESSEE STATED THAT W HEN THE PARTNER CONTRIBUTES A CAPITAL ASSET TO A FIRM IN WHICH HE B ECOMES A PARTNER IT IS A VALID TRANSFER AND THUS THE FIRM BECOMES THE ABSOLU TE OWNER OF THAT PROPERTY AND THUS NO REGISTRATION IS REQUIRED FOR BECOMING T HE OWNER. RELYING ON VARIOUS DECISIONS IT WAS SUBMITTED THAT THE ASSESSEE NEED N OT BE THE OWNER OF THE LAND FOR CLAIMING DEDUCTION U/S.80IB(10). 4. SO FAR AS THE ISSUE RELATING TO DENIAL OF DEDUCT ION ON THE GROUND THAT THE HOUSING PROJECT AS A WHOLE HAS NOT BEEN AP PROVED BY THE LOCAL AUTHORITY IT WAS SUBMITTED THAT THE HOUSING PROJECT HAS BEEN BUILT ON SURVEY NUMBER 110/2A+2B+2C+111/3/L AND HAS BEEN NAMED AS S UNDAR NAGAR AT BHUSAWAL. THE WHOLE LAYOUT AS ONE SINGLE LAYOUT PLO T HAS BEEN APPROVED BY THE ITA NO.883/PN/2013 LOCAL AUTHORITY IE BHUSAWAL MUNICIPAL COUNCIL WHI CH FURTHER AS A WHOLE HAS BEEN APPROVED BY THE COLLECTOR JALGAON AS A RESIDE NTIAL PROJECT. THE TOTAL AREA UNDER THE LAYOUT IS 25300 SQ.MTRS WHICH EXCEEDS 1 A CRE AND AFTER REDUCING LAND UNDER ROADS AND GARDEN THE NET AREA COMES TO 16365 .64 SQ MTRS. AFTER GETTING APPROVAL ONLY THE FURTHER DEVELOPMENT HAS COMMENCE D AND THEREFORE IT IS ONE LAYOUT AND HAS BEEN APPROVED AS A WHOLE HOUSING PRO JECT. THE APPLICATION FOR THE APPROVAL OF BUILDING PERMISSION ADMEASURING TOT AL 10327.66 SQ MTRS WITH TOTAL BUILT UP AREA 5894.69 SQ MTRS WAS FIRST MADE ON 12/09/2006 AND THE FIRST APPROVAL WAS RECEIVED ON 09/10/2006 FOR TOTAL 84 RO W HOUSES. THEREAFTER THE SECOND APPROVAL WAS RECEIVED ON 29/11/2006 FOR 14 R OW HOUSES 18 FLATS AND 8 SHOPS TOTALLY ADMEASURING 121.34 SQ M [APPROX 130 6 SQ FT WHICH IS FAR LESS THAN 2000 SQ FT ALLOWED U/S 80-IB(10)]. THE DETAILS OF ALL BUILDING SANCTIONED PLANS GRANTED BY BHUSAWAL MUNICIPAL COUNCIL WERE FI LED IN SHAPE OF A CHART. IT WAS ACCORDINGLY SUBMITTED THAT THERE IS NO FORCE IN THE OBSERVATION MADE BY THE AO THAT THE PERMISSION HAS BEEN TAKEN AS AND WHEN R EQUIRED. IT WAS SUBMITTED THAT PHOTOCOPIES OF ALL THE ABOVE MENTION ED APPROVED BUILDING PERMISSION PLANS WERE SUBMITTED TO THE AO AND ARE O N THE RECORD OF THE AO AT THE TIME OF ASSESSMENT. RELYING ON VARIOUS DECISIO NS AND CBDT CIRCULAR NO.5 OF 2005 DATED 15-07-2005 IT WAS SUBMITTED THAT THE WHOLE RESIDENTIAL PROJECT HAS BEEN APPROVED AND IMPLEMENTED AS A CONCEPT OF G ROUP HOUSING AND IS ONE HOUSING PROJECT ONLY. 4.1 SO FAR AS THE DENIAL OF DEDUCTION ON THE GROUND THAT ONE OF THE HOUSING UNIT SOLD TO SHRI RAJKUMAR PARWANI & SMT. M EENA R. PARWANI IS IN EXCESS OF BUILT UP AREA OF 1500 SQ.FT. IT WAS STATE D THAT IT HAS SOLD 2 UNITS EACH ADMEASURING 105.96 SQ MTS [1140 SQ.FT] TO MR. RAJKU MAR PARWANI AND HIS WIFE WHICH IS EVIDENCED BY 2 REGISTERED 'AGREEMENT TO SA LE' DT. 08-03-2007. THEREAFTER FINAL 2 SALE DEEDS WERE REGISTERED AND EXECUTED ON 24-07-2007 IN THEIR NAME. THEY ARE SEPARATE ROW HOUSES AND EVEN T HEIR PERMISSIONS HAVE BEEN TAKEN SEPARATELY. THE PHOTOCOPY OF MUNICIPAL HOUSE TAX RECEIPT IN THE NAME OF MR. PARVANI OF 2 UNITS WERE FILED. A CERTIF ICATE FROM CONSULTING ENGINEER DEEPAK GAJARE WHO HAS SUPERVISED THE CONSTRUCTION AND IS CONSULTANT OF THE FIRM WAS ALSO FILED WHO HAS CERTIFIED THAT THE 'FO UNDATION' RCC AND 'STRUCTURAL DESIGN' IS FOR 2 UNITS. THE PHOTOCOPY OF RCC STRUCT URAL DESIGN WAS ALSO SUBMITTED. IT WAS ACCORDINGLY SUBMITTED THAT THERE IS NO BREACH OF CONDITION U/S 80-IB (10) AS BOTH THE ROW HOUSES ARE HAVING BUILT UP AREA BELOW 1500 SQ.FT EACH. MOREOVER THE SALE DEEDS WERE EXECUTED IN AY 2 008-2009 AND EVEN ON THAT GROUND DEDUCTION U/S.80-IB(10) CANNOT BE REJE CTED IN A.Y. 2007-2008. THE ASSESSEE FURTHER MENTIONED ANOTHER INSTANCE OF SALE DEED WITH SHRI. BADRIPRASAD CHOURASIYA AND SMT SHARDA CHOURASIYA AN D STATED THAT THEIR STATEMENTS WERE ALSO RECORDED BY THE DEPARTMENT'S I NSPECTOR WHEN HE ENQUIRED ABOUT IT FROM THEM REGARDING THE SAME ISSUE WHEREIN THEY HAVE STATED THAT THEY HAVE BOUGHT 2 SEPARATE BLOCKS. IT WAS ARGUED THAT THIS ALSO PROVES THAT THE ASSESSEE HAS SOLD 2 IDENTICAL BLOCKS TO MR. PARWANI WHO HAS THEREAFTER MODIFIED THE SAME ACCORDING TO HIS OWN NEEDS. IT WAS SUBMITT ED THAT THE DEPARTMENT OFFICIAL VISITED OTHER IDENTICAL BLOCKS AT THE SITE OF THE ASSESSEE AND MAY HAVE ALSO SUBMITTED HIS REPORT. IT CAN BE CONFIRMED FROM HIS REPORT THAT THE FIRM HAS BUILT 2 IDENTICAL ROW HOUSES THROUGHOUT THE SITE. T HE ASSESSEE FIRM HAS ALSO SUBMITTED ANNEXURE A WHEREIN IT HAS DISTINGUISHED T HE STATEMENT ON OATH GIVEN BY MR. PARWANI WITH ACTUAL FACTS AND EXPLAINI NG THE FACTUAL POSITION ON THE SITE WITH THE HELP OF SOME READY PHOTOS OF THE SITE . 4.2 AS REGARDS DENIAL OF DEDUCTION ON THE GROUND TH AT THE BHUSAWAL MUNICIPAL COUNCIL HAS NOT ISSUED COMPLETION CERTIFI CATE IT WAS SUBMITTED THAT THE PHOTOCOPY OF BUILDING COMPLETION CERTIFICATES D ATED 12-08-2009 WERE SUBMITTED TO THE AO DURING THE ASSESSMENT PROCEEDIN GS. IT WAS SUBMITTED THAT THE RESIDENTIAL UNITS WERE COMPLETED BEFORE EX ECUTING THE SALE DEED AND THE SAME IS ALSO MENTIONED IN THE SALE DEED. IT WAS ARGUED THAT U/S.80-IB (10) ITA NO.883/PN/2013 THE TIME LIMIT FOR COMPLETING THE PROJECT IS 4 YEAR S FROM THE DATE OF FIRST APPROVAL BY THE LOCAL AUTHORITY I.E. [BHUSAWAL MUN ICIPAL COUNCIL]. THE BUILDING COMMENCEMENT CERTIFICATE WAS FIRST APPLIED ON 12-09-2006 AND THE APPROVAL WAS RECEIVED FIRST ON 09-10-2006 AND THUS THE TIME LIMIT FOR COMPLETING THE BUILDING WAS 09-10-2010 AND THE ASSE SSEE HAS SUBMITTED THE COMPLETION CERTIFICATE FROM BHUSAWAL MUNICIPAL COUN CIL [LOCAL AUTHORITY] DT. 12-08-2009 WHICH IS WELL WITHIN THE STIPULATED PERI OD AS MENTIONED U/S. 80-IB (10). THIS FACT HAS ALSO BEEN ACCEPTED BY THE AO IN HIS ASSESSMENT ORDER. IT WAS ACCORDINGLY SUBMITTED THAT EVEN ON THIS GROUND THE AO'S OBSERVATIONS ARE LIABLE TO BE REJECTED AND THE DEDUCTION U/S.80-IB(1 0) CANNOT BE DENIED. 4.3 SO FAR AS THE DENIAL OF DEDUCTION ON THE GROUND THAT THE PAMPHLET OF THE PROJECT SHOWS THE PLANNED INDEPENDE NT BUNGALOW HAVING BUILT UP AREA OF 1752 SQ.FT. IT WAS SUBMITTED THAT THE SA ID ISSUE/GROUND HAS NOT EVEN BEING DISCUSSED BY THE SAME AO IN HIS ASSESSMENT OR DER U/S.143(3) FOR A.Y. 2008-09. IT WAS SUBMITTED THAT THE ASSESSEE HAD OR IGINALLY PLANNED THE HOUSING PROJECT FOR HIGH INCOME GROUP BUT LOOKING T HE POTENTIAL OF BUYERS IN BHUSAWAL THE SAID PLAN WAS DROPPED AND THE PROJECT WAS DESIGNED TO SUIT LOW INCOME GROUP. THUS THE PLAN WAS NEVER IMPLEMENTED. IT WAS SUBMITTED THAT THEY HAD SUBMITTED BUILDING PERMISSION FOR ALL THE UNITS TO THE AO AND IN NOT A SINGLE CASE THE BUILDING PERMISSION HAS EXCEEDED T HE PRESCRIBED LIMIT OF 1500 SQFT. THE CERTIFICATE DATED 7/01/2011 FROM BHUSAWAL MUNICIPAL COUNCIL STATING THAT THE BUILDING WORK AT S NO 110/2A + 2B + 2C + 1 11/3A/1 HAS BEEN DONE/CARRIED IN ACCORDANCE WITH THE BUILDING PERMIS SION AS GRANTED BY BHUSAWAL MUNICIPAL COUNCIL WAS FILED. IT WAS ACCOR DINGLY SUBMITTED THAT THE ASSESSEE FIRM HAS NOT BUILT OR SOLD ANY UNIT EXCEED ING 1500 SQFT BEING THE PRESCRIBED LIMIT U/S 80IB (10). 5. BASED ON THE ARGUMENTS ADVANCED BY THE ASSESSEE THE LD.CIT(A) HELD THAT THE ASSESSEE IS ENTITLED TO DED UCTION U/S.80-IB(10). HE DISCUSSED POINT-WISE ON WHICH THE ASSESSING OFFICER HAD DENIED DEDUCTION U/S.80-IB(10). AS REGARD THE OBJECTION OF THE ASSE SSING OFFICER THAT THE LAND IS NOT IN THE NAME OF THE FIRM BUT IN THE NAME OF THE PARTNERS HE HELD THAT THE ASSESSEE IS ENTITLED TO CLAIM DEDUCTION U/S.80-IB(1 0) BY OBSERVING AS UNDER : 5.1 I HAVE CAREFULLY GONE THROUGH THE SUBMISSION O F THE APPELLANT AND THE MATERIAL ON RECORD. THOUGH THE LAND IS IN THE N AME OF PARTNERS THEY HAVE CONTRIBUTED THE SAME AS THEIR CAPITAL CON TRIBUTION TO THE FIRM AND THEREAFTER ALL THE EXPENSES FOR DEVELOPMENT OF LAND HAS BEEN INCURRED BY THE FIRM. FURTHER THE SALE RECEIPTS FR OM RESIDENTIAL UNITS HAVE ALSO BEEN CREDITED BY THE FIRM. IN ORDER TO CL AIM DEDUCTION U/S.80- IB(10) THE ASSESSEE NEED NOT BE THE OWNER OF THE L AND. WHILE GOING THROUGH THE RELEVANT SECTION IT CAN BE SEEN THAT NO WHERE IT IS MENTIONED THAT THE UNDERTAKING IN ORDER TO CLAIM DEDUCTION U/ S.80-1B(10) SHOULD BE THE OWNER OF THE LAND. THE SAID ISSUE SPECIFICAL LY RELATING TO DEDUCTION U/S 80IB(10) HAS ALREADY BEEN DECIDED IN NUMBER OF CASES SUCH AS : I) RADHE DEVELOPERS VS. ITO [2008] 113 TTJ (AHD ) 300 II) ITO VS. SHAKTI CORPORATION [2009] 32 SOT 438 (AHD) III) KZK DEVELOPERS VS. CIT [2010] 130 TTJ [CTK] [U O] 57 IV) ITO VS. SHAKTI BUILDERS - ITA NO 3697/AHD/2007 V) ACIT VS. SMT C. RAJNI ITA NO 1239/MDS/2008 & ITA NO. 1666/MDS /2007 AND THE DCIT VS. SHRI C SUBB A REDDY (HUF) ITA NO 1907/MDS/2008 ITA NO.883/PN/2013 VI) ESSEM CAPITAL MARKETS LTD VS. ITO ITA NO.68 14/MUM./2006 AND 5349/MUM./2007 DT. 25/02/2011 [REPORTED IN 171( 2011) 43-A BCAJ FURTHER SECTION 45(3) OF THE INCOME TAX ACT 1961 CL EARLY STATES THE LAW RELATING TO TRANSFER OF CAPITAL ASSET TO THE FIRM B Y ITS PARTNERS AS THEIR CAPITAL CONTRIBUTION. ALSO U/S. 2(47) OF THE INCOME TAX ACT 1961 STATES 'TRANSFER' INCLUDES POSSESSION OF IMMOVABLE PROPERT Y GIVEN WITHOUT REGISTRATION OF CONVEYANCE DEED; AND ALSO TRANSACTI ONS IN AGREEMENTS TO BUY OR SELL ANY IMMOVABLE PROPERTY OR ANY RIGHTS THEREON. THE AO SHOULD HAVE CONSIDERED THIS IMPORTANT ASPECT. THE JUDICIAL DECISIONS CITED BY THE APPELLANT ARE SQUARELY APPLICABLE TO H IS CASE AND THEREFORE THE APPELLANT FIRM IS ELIGIBLE FOR DEDUCTION ON THI S GROUND. 5.1 AS REGARDS THE DENIAL OF DEDUCTION ON THE GROUN D THAT THE HOUSING PROJECT HAS NOT BEEN APPROVED BY THE LOCAL AUTHORITY HE ALLOWED THE CLAIM OF THE ASSESSEE BY HOLDING AS UNDER : 6.1 I HAVE CAREFULLY CONSIDERED THE CIRCULAR NO. 5 OF 2005 DATED 15/07/2005 ISSUED BY CBDT WHICH HAS ALSO EXPRESSED THE SAME VIEWS THAT 'THE HOUSING PROJECT SHOULD CONFORM TO THE PRO JECT PLAN APPROVED BY THE LOCAL AUTHORITY IN ACCORDANCE WITH THE REGUL ATIONS IN FORCE. ALSO THE AREA LIMIT OF THE PLOT HAS TO BE CONSTRUED WITH REFERENCE TO THE AREA OF THE SITE ON WHICH THE HOUSING PROJECT IS CON STRUED AND NOT WITH REFERENCE TO THE DEMARCATION OF LAND DONE BY THE LA ND DEVELOPMENT AUTHORITY.' MOREOVER THE APPELLANT HAS ALSO SUBMIT TED A COPY OF RELEVANT SECTION 5 OF STANDARDISED BUILDING BY-LAWS AND DEVELOPMENT CONTROL RULES FOR 'A' CLASS MUNICIPAL COUNCILS OF MAHARASHTRA WHEREIN IT IS STATED THAT 'NO PERSON SHALL CARRY OUT ANY DEVELOPMENT WORK INCLUDING DEVELOPMENT OF LAND BY LAYING OUT IN TO SUITABLE PLOTS OR DEVELOPMENT OF ANY LAND ......... WITHOUT FIRST O BTAINING A SEPARATE BUILDING PERMIT AND COMMENCEMENT CERTIFICATE FOR EA CH SUCH BUILDING FROM THE AUTHORITY .' THIS CLEARLY SUPPORTS THE APPELLANT FIRM'S CLAI M AS THEY CANNOT OVERRIDE THE LOCAL LAWS AND HAS TO BUIL D THE PROJECT AS PER RULES LAID DOWN BY THE BHUSAWAL MUNICIPAL COUNCIL [ LOCAL AUTHORITY] WHICH BEING AN A CLASS MUNICIPAL COUNCIL IS BOUND T O FOLLOW THE STATUTE. IT IS FURTHER SEEN FROM THE CORRESPONDENCE MADE BET WEEN THE APPELLANT AND THE BHUSAWAL MUNICIPAL CORPORATION THAT THE LAY OUT AS A WHOLE HAS BEEN APPROVED BY THE LOCAL AUTHORITY. THE CASE LAWS CITED BY THE APPELLANT ARE ALSO SQUARELY APPLICABLE TO HIS CASE. I THEREFORE HOLD THAT THOUGH THE PERMISSION FOR EACH UNIT HAS BEEN TAKEN SEPARATELY THE APPELLANT FIRM HAS TAKEN THE SAME IN ACCORDANCE WIT H THE BYE-LAWS WHICH ARE BINDING ON THE APPELLANT AND CIRCULAR NO 5 OF CBDT DATED 15/07/2005 ALSO UPHOLDS THE APPELLANT'S CASE AND I THEREFORE ALLOW THIS GROUND OF APPEAL AND TREAT THE PROJECT AS BEIN G DEVELOPED AS ONE HOUSING PROJECT. 5.2 AS REGARDS THE OBJECTION OF THE ASSESSING OFFIC ER THAT ONE OF THE UNIT SOLD IS HAVING BUILT UP AREA OF MORE THAN 1500 SQ.FT. HE HELD IN FAVOUR OF THE ASSESSEE BY HOLDING AS UNDER : 7.1 I HAVE GONE THROUGH THE WRITTEN SUBMISSION AND MATERIAL ON RECORD. DURING THE APPELLATE PROCEEDINGS IN ORDER T O VERIFY THE BUILT UP AREA ABOUT THE ADJACENT ROW HOUSES THE APPELLANT W AS ASKED TO PRODUCE SALE DEEDS OF ADJACENT RESIDENTIAL UNITS NE AR MR PARWANI & BUILDING PERMISSION OF ALL THE UNITS ISSUED BY THE LOCAL AUTHORITY. IT IS SEEN THAT NO BUILDING PERMISSION IS IN EXCESS OF 15 00 SQ.FT. AS PRESCRIBED U/S 80-IB(10) BESIDES THE APPELLANT FI RM HAS VOLUNTARILY SUBMITTED A CERTIFICATE FROM CHIEF OFFICER BHUSAWA L MUNICIPAL COUNCIL ITA NO.883/PN/2013 DATED 17/01/2011 WHICH STATES THAT THE 'BUILDING PE RMISSION HAS ALREADY BEEN GRANTED FOR THE PLOTS IN WHOLE LAYOUT AND THE BUILDING WORK HAS BEEN DONE/CARRIED IN ACCORDANCE WITH THE B UILDING PERMISSION AS GRANTED BY BHUSAWAL MUNICIPAL COUNCIL.' FURTHER THE APPELLANT HAS SUBMITTED ONE MORE CERTIFICATE FROM BHUSAWAL MUNICI PAL COUNCIL DATED 07/02/2011 WHICH ALSO SUMMARIZES THE BUILT UP AREA OF EACH COMPLETED BUILDING AND IN THIS ALSO NONE OF THE RESIDENTIAL U NITS IS HAVING BUILT UP AREA EXCEEDING 1500 SQFT. THE APPELLANT HAS PRODUC ED ADEQUATE MATERIAL IN SUPPORT OF HIS CONTENTION THAT NO UNIT WAS MORE THAN 1500 SQ. FT. A PERUSAL OF RECORD REVEALS THAT AO ALSO GO T THE INSPECTION DONE OF THE RESIDENTIAL UNIT OF SHRI PARWANI. AO IS OF THE OPINION THAT THE SAID UNIT IS ONE SINGLE UNIT AND EXCEEDS THE PRESCRIBED LIMIT OF 1500 SQ FT.. THE STATEMENT OF MR. PARWANI THOUGH UNDER DISPUTE GOES AGAINST THE CONTENTION OF THE APPELLANT. HOWEVER EVIDENCES PRO DUCED BY THE APPELLANT CANNOT BE BRUSHED ASIDE. IT HAS COME TO THE NOTICE THAT MR. PARWANI HAS LET OUT THE ENTIRE BUILDING TO ONE PSU AND PROBABLY UNDERTOOK THE ALTERATION OF THE BUILDING TO THE REQ UIREMENT OF THE TENANT. THE ISSUE THEREFORE REMAINS DISPUTED. HOWE VER I AM OF THE CONSIDERED VIEW ESPECIALLY UNDER THE CIRCUMSTANCES OF THE CASE THAT DEDUCTION U/S 80-IB(10) SHOULD NOT HAVE BEEN DISALL OWED IN FULL ON THIS ISSUE ALONE. AT BEST DEDUCTION U/S. 80-IB(10) COU LD BE DISALLOWED ON PRO RATA BASIS AS HELD BY VARIOUS DECISION GIVEN BY THE APPELLANT. IN VIEW OF THE FACTS AND CIRCUMSTANCES MENTIONED ABOVE I AM O F THE CONSIDERED OPINION THAT THE APPELLANT WOULD BE ENTITLED FOR DE DUCTION U/S. 80IB(10) BUT FOR THE AMOUNT INVOLVED IN TRANSACTIONS WITH PA RWANIS WITH RESPECT TO PLOT NO. 8 (8A & 8B). AO IS DIRECTED TO REDUCE T HE AMOUNT CLAIMED BY THE APPELLANT ON PLOT NO.8 FROM THE TOTAL CONSIDERA TION ON WHICH THE APPELLANT HAS CLAIMED DEDUCTION U/S 80-IB(10). THUS THE APPELLANT WILL NOT BE DENIED DEDUCTION U/S 80-IB ON THE WHOLE AMOU NT ON THIS GROUND ALONE. 5.3 SO FAR AS THE OBJECTION OF THE ASSESSING OFFICE R THAT THE BHUSAWAL MUNICIPAL COUNCIL HAS NOT ISSUED COMPLETIO N CERTIFICATE UPTO 27.02.2009 HE HELD IN FAVOUR OF THE ASSESSEE BY HOL DING AS UNDER : 8.1 I HAVE GONE THROUGH THE SUBMISSION AND MATERIA L ON RECORD AND IT IS SEEN THAT THE AO HAS ACCEPTED THAT THE COMPLE TION CERTIFICATES HAVE BEEN SUBMITTED BY THE APPELLANT DURING THE ASS ESSMENT PROCEEDINGS ITSELF. FURTHER THE AO HAS NOT QUESTIO NED THE COMPLETION OF THE UNIT BEFORE SALE DEED. THE AUTHORISED REPRESENT ATIVE OF THE APPELLANT FIRM STATED THAT THE SALE DEED OF ALL THE RESIDENTIAL UNITS WERE SUBMITTED TO THE AO AND THE SALE DEED CLEARLY MENTI ON THAT THE UNIT IS COMPLETE IN ALL RESPECT. THE AR ALSO MENTIONED THAT THE BANK WILL NOT ISSUE FINAL PAYMENTS IF THE UNITS ARE INCOMPLETE AT THE TIME OF EXECUTION OF SALE DEED. FURTHER A PERUSAL OF ANNEXURE ENCLOS ED BY MUNICIPAL COUNCIL BHUSAWAL ALONGWITH THEIR CERTIFICATE DATED 07/02/2011 REVEALS THAT DATE OF COMPLETION CERTIFICATE IN RESPECT OF A LL THE UNITS IS WITHIN THE TIME LIMIT PRESCRIBED UNDER SEC. 80-IB(10). I FURTH ER HOLD THAT MERE DELAY IN OBTAINING COMPLETION CERTIFICATE WILL NOT ADVERS ELY AFFECT THE ASSESSEE. THE APPELLANT HAS 4 YEARS [NOW 5 YEARS] TO OBTAIN C OMPLETION CERTIFICATE. IT IS THE DATE OF 'COMPLETION' WHICH IS REQUIRED TO BE TAKEN INTO CONSIDERATION TO DECIDE THE APPLICABILITY OF SEC. 8 0-IB(10) AND NOT THE DATE OF COMPLETION CERTIFICATE PER SECTION. HENCE THE D EDUCTION ON THIS GROUND ALSO CANNOT BE DENIED TO THE APPELLANT. THUS THE APPELLANT SUCCEEDS ON THIS GROUND OF APPEAL. ITA NO.883/PN/2013 5.4 HE ALSO DECIDED IN FAVOUR OF THE ASSESSEE AGAIN ST THE OBJECTION OF THE ASSESSING OFFICER THAT THE PAMPHLET OF THE P ROJECT SHOWS THE PLANNED INDEPENDENT BUNGALOW HAVING BUILT UP AREA OF 1752 S Q.FT. BY HOLDING AS UNDER : 9.1 I HAVE CAREFULLY CONSIDERED THE WRITTEN SUBMIS SION AND ALSO THE ASST. ORDER OF AY 2008-09 AND PLEA PUT FORTH BY THE AR THAT THE SAID ISSUE DOES NOT FIND ANY PLACE IN THE ASSESSMENT ORDER FOR AY 2008-09 AND THUS THE AO HIMSELF HAS ACCEPTED THIS GROUND AND TH EREFORE I HOLD THAT SINCE THIS GROUND HAS NOT BEEN MENTIONED IN AY 2008 -09 AND ALSO THAT ALL BUILDING PERMISSIONS ARE ON THE RECORD WHEREIN NO RESIDENTIAL UNIT EXCEEDS 1500 SQ FT AND ALSO THAT THE ORIGINAL PLAN HAS NOT BEEN IMPLEMENTED AND HENCE THE DEDUCTION ON THIS GROUND ALSO CANNOT BE DENIED TO THE APPELLANT. THUS THE APPELLANT SUCCEE DS ON THIS GROUND OF APPEAL 6. AGGRIEVED WITH SUCH ORDER OF CIT(A) THE REVENUE IS IN APPEAL BEFORE US. 7. WE HAVE HEARD THE RIVAL ARGUMENTS MADE BY BOTH T HE SIDES PERUSED THE ORDERS OF THE AO AND CIT(A) AND THE PAP ER BOOK FILED ON BEHALF OF THE ASSESSEE. WE HAVE ALSO CONSIDERED THE VARIO US DECISION CITED BEFORE US. WE FIND THE AO IN THE INSTANT CASE DENIED THE DEDUCTION U/S.80IB(10) ON THE GROUND THAT (A) THE LAND IS IN THE NAME OF THE PARTNERS AND NOT IN THE NAME OF THE FIRM (B) THE PROJECT AS A WHOLE HAS NOT BEEN APPROVED BY THE LOCAL AUTHORITY (C) ONE OF THE UNITS SOLD TO A CUSTOMER I S IN EXCESS OF 1500 SQ.FT. (D) THE COMPLETION CERTIFICATE FROM LOCAL AUTHORITY HAS NOT BEEN OBTAINED TILL 27-02- 2009 AND (E) THE PAMPHLET OF THE PROJECT SHOWS THE PLANNED INDEPENDENT BUNGALOWS HAVING BUILT UP AREA 1752 SQ.FT. WE FIND ALL THE OBJECTIONS HAVE BEEN DECIDED IN FAVOUR OF THE ASSESSEE BY THE LD.CI T(A) WHICH HAS ALREADY BEEN REPRODUCED IN THE PRECEDING PARAGRAPHS WHICH H AS BEEN CHALLENGED BY THE REVENUE IN THE GROUNDS OF APPEAL. 7.1 SO FAR AS THE GRIEVANCE OF THE REVENUE THAT THE LAND IS NOT IN THE NAME OF THE FIRM AND IS IN THE NAME OF THE PARTNERS AND THEREFORE THE ASSESSEE IS NOT ENTITLED TO DEDUCTION U/S.80IB(10) OF THE I.T. ACT 1961 WE FIND THE ISSUE STANDS DECIDED IN FAVOUR OF THE ASSESSEE BY THE DECISION OF THE HONBLE GUJARAT HIGH COURT IN THE CASE OF CIT VS. R ADHE DEVELOPERS REPORTED IN 341 ITR 403 WHEREIN THE HONBLE HIGH COURT HAS U PHELD THE DECISION OF THE TRIBUNAL WHICH WAS RELIED ON BY THE LD.CIT(A). THE RELEVANT OBSERVATION OF THE HONBLE HIGH COURT READS AS UNDER : SECTION 80IB(10) OF THE INCOME TAX ACT 1961 REQU IRES INVOLVEMENT OF AN UNDERTAKING IN DEVELOPING AND BUILDING HOUS ING PROJECTS APPROVED BY THE LOCAL AUTHORITY. CERTAIN CONDITION S ARE PRESCRIBED IN SUB SECTION (10) SUCH AS THE DATE BY WHICH THE UNDE RTAKING MUST COMMENCE AND DEVELOPING AND CONSTRUCTION WORK AND T HE MINIMUM AREA OF PLOT OF LAND ON WHICH SUCH PROJECT WOULD BE PUT UP AS WELL AS THE MAXIMUM BUILT UP AREA OF EACH OF THE RESIDENTIA L UNITS TO BE LOCATED THEREON. THE PROVISIONS NOWHERE REQUIRED THAT ONLY THOSE DEVELOPERS WHO THEMSELVES OWN THE LAND WOULD RECEIVE THE DEDUC TION UNDER SECTION 80IB(10) OF THE ACT. NEITHER THE PROVISION S OF SECTION 80IB NOR ANY OTHER PROVISIONS CONTAINED IN OTHER RELATED STA TUTES DEMONSTRATE THAT OWNERSHIP OF THE LAND WOULD BE A CONDITION PRE CEDENT FOR DEVELOPING THE HOUSING PROJECT. SUCH REQUIREMENT CA NNOT BE READ INTO THE STATUTE BECAUSE THERE IS NOTHING IN SECTION 80I B (10) OF THE ACT REQUIRING THAT OWNERSHIP OF THE LAND MUST VEST IN T HE DEVELOPER FOR HIM TO BE ABLE TO QUALIFY FOR SUCH DEDUCTION. MOREOVER THE TERM DEVELOPER HAS BEEN UNDERSTOOD IN COMMON PARLANCE AS WELL AS IN THE LEGAL SENSE CARRYING A MUCH WIDER CONNOTATION. ITA NO.883/PN/2013 IT IS WELL SETTLED THAT WHILE INTERPRETING A STATUT E PARTICULARLY A TAXING STATUTE NOTHING CAN BE READ INTO THE PROVISIONS WH ICH HAS NOT BEEN PROVIDED BY THE LEGISLATURE. THE CONDITION WHICH I S NOT MADE PART OF SECTION 80IB(10) OF THE ACT NAMELY THAT OF OWNING THE LAND WHICH THE ASSESSEE DEVELOPS CANNOT BE SUPPLIED BY ANY PURPOR TED LEGISLATIVE INTENT. THE ASSESSEE CLAIMED DEDUCTION UNDER SECTION 80IB(1 0) OF THE ACT ON THE PREMISE THAT SUCH INCOME WAS DERIVED FROM THE B USINESS OF THE UNDERTAKING DEVELOPING AND BUILDING HOUSING PROJECT S APPROVED BY THE LOCAL AUTHORITY. TO EXECUTE SUCH HOUSING PROJECTS THE ASSESSEE HAD ENTERED INTO DEVELOPMENT AGREEMENTS WITH LAND OWNER S. UNDER THESE DEVELOPMENT AGREEMENTS THE ASSESSEE AGREED TO DEVE LOP THE LAND BELONGING TO THE LAND OWNERS ON CERTAIN TERMS AND C ONDITIONS. ON THE SAME DAY THE LAND OWNERS ENTERED INTO AGREEMENTS TO SELL THE LAND IN QUESTION TO THE ASSESSEES. THE ASSESSEES WERE DESCR IBED AS PURCHASERS AND THE LAND OWNERS WERE DESCRIBED AS TH E SELLERS. THE PROFIT OR LOSS FROM THE PROJECT WAS TO BE THE ASSES SEES. IN SOME CASES THE ASSESSEE WAS TO RECEIVE A FIXED REMUNERA TION FOR THE DEVELOPMENT. THE ASSESSING OFFICER REJECTED THE AS SESSEES CLAIM FOR DEDUCTION UNDER SECTION 80-IB(10) OF THE ACT ON THE GROUND THAT THE ASSESSEES WERE NOT THE OWNERS OF THE LAND THAT APP ROVAL BY THE LOCAL AUTHORITY AND PERMISSION TO DEVELOP THE PROJECT AN D COMMENCE CONSTRUCTION WERE NOT IN THE NAME OF THE ASSESSEES AND THAT THE ASSESSEES HAD MERELY ACTED AS AGENTS OR CONTRACTORS FOR CONSTRUCTION OF RESIDENTIAL HOUSES. THE TRIBUNAL HELD THE ASSES SEES ENTITLED TO THE DEDUCTION. ON APPEALS BY THE DEPARTMENT : HELD ACCORDINGLY (I) THAT THE TERMS AND CONDITIONS UNDER WHICH THE ASSESSEES UNDERTOOK THE DEVELOPMENT PROJECTS AND TO OK OVER THE POSSESSION OF THE LAND FROM THE ORIGINAL OWNERS IN DICATED THAT THE ASSESSEES HAD TOTAL AND COMPLETE CONTROL OVER THE L AND IN QUESTION. THE ASSESSEES COULD PUT THE LAND TO USE AS AGREED B ETWEEN THE PARTIES. THE ASSESSEE HAD FULL AUTHORITY AND ALSO R ESPONSIBILITY TO DEVELOP THE HOUSING PROJECT BY NOT ONLY PUTTING UP THE CONSTRUCTION BUT BY CARRYING OUT VARIOUS OTHER ACTIVITIES INCLUDING ENROLLING MEMBERS ACCEPTING MEMBERS CARRYING OUT MODIFICATIONS ENGAG ING PROFESSIONAL AGENCIES AND SO ON. MOST SIGNIFICANTLY THE RISK E LEMENT WAS ENTIRELY THAT OF THE ASSESSEES. THE LAND OWNERS AGREED TO AC CEPT ONLY A FIXED PRICE FOR THE LAND IN QUESTION. THE ASSESSEES AGREE D TO PAY OFF THE LAND OWNERS FIRST BEFORE APPROPRIATING ANY PART OF THE SALE CONSIDERATION OF THE HOUSING UNITS FOR THEIR BENEFI T. IN SHORT THE ASSESSEES TOOK THE FULL RISK OF EXECUTING THE HOUSI NG PROJECT AND THEREBY MAKING PROFIT OR LOSS AS THE CASE MAY BE. THE ASSESSEES INVESTED THEIR OWN FUNDS IN THE COST OF CONSTRUCTIO N AND ENGAGEMENT OF SEVERAL AGENCIES. IT COULD NOT BE SAID THAT THE AS SESSEES ACTED ONLY AS WORKS CONTRACTORS. IN THAT VIEW OF THE MATTER THE ADDITION OF THE EXPLANATION TO SECTION 80-IB(10) WITH RETROSPECTIVE EFFECT FROM APRIL 1 2001 WOULD HAVE NOT MATERIAL BEARING IN THE CASES ON HAND. (II) THAT THE ASSESSEE HAD IN PART PERFORMANCE OF THE AGREEMENT TO SELL THE LAND IN QUESTION BEEN GIVEN POSSESSION THEREOF AND HAD ALSO CARRIED OUT THE CONSTRUCTION WORK FOR DEVELOPM ENT OF THE HOUSING PROJECT. A COMBINED READING OF SECTION 2(47)(V) OF THE ACT AND SECTION 53A OF THE TRANSFER OF PROPERTY ACT 1882 WOULD LE AD TO A SITUATION WHERE THE LAND WOULD FOR THE PURPOSE OF THE ACT BE DEEMED TO HAVE BEEN TRANSFERRED TO THE ASSESSEES. IN THAT VIEW OF THE MATTER FOR THE PURPOSE OF INCOME DERIVED FROM SUCH PROPERTY THE A SSESSEES WOULD ITA NO.883/PN/2013 BE THE OWNERS OF THE LAND FOR THE PURPOSE OF THE AC T ALTHOUGH TITLE IN THE LAND HAD NOT YET PASSED ON TO THE ASSESSEES AND WOU LD PASS ONLY UPON EXECUTION OF A DULY REGISTERED SALE DEED. FOR THE LIMITED PURPOSE OF DEDUCTION UNDER SECTION 80-IB(10) OF THE ACT TH E ASSESSEES HAD SATISFIED THE CONDITION OF OWNERSHIP ALSO EVEN IF IT WAS NECESSARY. (III) THAT EVEN IN CASES WHERE THE AGREEMENT PROVID ED THAT THE ASSESSEE WAS TO RECEIVE A REMUNERATION THE ASSESSE E WAS GIVEN FULL RIGHTS TO DEVELOP THE LAND BY PUTTING UP THE HOUSIN G PROJECT AT ITS OWN RISK AND COST. THE ENTIRE PROFIT FLOWING THEREFROM WAS TO BE RECEIVED BY THE ASSESSEE. THE PROJECT WAS BEING DEVELOPED BY T HE ASSESSEE AT ITS OWN RISK AND COST AND NOT THAT OF THE LAND OWNERS. THE ASSESSEE THUS WAS NOT WORKING AS A WORKS CONTRACTOR. INTRODUCTIO N OF THE EXPLANATION TO SECTION 80-IB(10) IN THIS CASE ALSO WOULD HAVE N O EFFECT. THE ASSESSEE WAS ENTITLED TO THE BENEFIT UNDER SECTION 80-IB(10) OF THE ACT EVEN WHERE THE TITLE TO THE LAND HAD NOT PASSED ON TO THE ASSESSEE AND THE DEVELOPMENT PERMISSION MAY ALSO HAVE BEEN OBTAI NED IN THE NAME OF THE ORIGINAL LAND OWNERS. 7.2 RESPECTFULLY FOLLOWING THE ABOVE DECISION OF TH E HONBLE HIGH COURT AND IN ABSENCE OF ANY CONTRARY MATERIAL BROUG HT TO OUR NOTICE ON THIS POINT THE FIRST OBJECTION OF THE REVENUE THAT THE L AND IS IN THE NAME OF THE PARTNERS AND NOT IN THE NAME OF THE FIRM IS REJECTE D AND THE SAME IS DECIDED IN FAVOUR OF THE ASSESSEE. 7.3 SO FAR AS THE OBJECTION OF THE REVENUE THAT THE HOUSING PROJECT AS A WHOLE HAS NOT BEEN APPROVED BY THE LOCAL AUTHO RITY WE FIND THE LD.CIT(A) WHILE DECIDING THE ISSUE HAS RELIED ON CBDT CIRCULA R NO.05/2005 DATED 15-07- 2005 AND SECTION 5 OF STANDARDISED BUILDING BYE-LAW S AND DEVELOPMENT CONTROL RULES APART FROM RELYING ON VARIOUS DECISIO NS. HE ALSO OBSERVED FROM THE CORRESPONDENCE BETWEEN THE ASSESSEE AND BHUSAWA L MUNICIPAL CORPORATION THAT THE LAYOUT AS A WHOLE HAS BEEN APP ROVED BY THE LOCAL AUTHORITY. THE LD. DEPARTMENTAL REPRESENTATIVE COU LD NOT CONTROVERT THE FINDINGS OF THE LD.CIT(A) ON THIS ISSUE. ACCORDING LY THE SECOND ISSUE ON WHICH THE AO HAS DENIED THE DEDUCTION U/S.80IB(10) IS DECIDED IN FAVOUR OF THE ASSESSEE AND THE ORDER OF THE CIT(A) ON THIS IS SUE IS UPHELD. 7.4 SO FAR AS THE GRIEVANCE OF THE REVENUE THAT ONE OF THE HOUSING UNITS SOLD IS IN EXCESS OF BUILT UP AREA OF 1500 SQ .FT. WE FIND THE LD.CIT(A) HAS HELD THAT EVEN THOUGH THE UNIT MAY BE MORE THAN 150 0 SQ.FT. HOWEVER THE ENTIRE DEDUCTION CANNOT BE DENIED AND ONLY PRO-RATA DISALLOWANCE CAN BE MADE. HOWEVER IN VIEW OF OUR FINDINGS IN SUBSEQUE NT PARAS IN ASSESSEES APPEAL WHEREIN IT HAS BEEN HELD THAT THE 2 UNITS CA NNOT BE HELD AS ONE UNIT THE GRIEVANCE OF THE REVENUE ON THIS ISSUE IS ALSO DISMISSED. 7.5 SO FAR AS THE DENIAL OF DEDUCTION U/S.80IB(10) ON THE GROUND THAT THE BHUSAWAL MUNICIPAL COUNCIL HAS NOT ISSUED COMPLETION CERTIFICATE UPTO 27-02-2009 WE FIND THE LD. CIT(A) HAS THOROUGHLY DI SCUSSED THE ISSUE AND HAS GIVEN A CATEGORICAL FINDING THAT THE AO HAS ACC EPTED THAT THE COMPLETION CERTIFICATES HAVE BEEN SUBMITTED BY THE ASSESSEE DU RING ASSESSMENT PROCEEDINGS ITSELF. THE LD. DEPARTMENTAL REPRESENT ATIVE COULD NOT CONTROVERT THE FINDINGS GIVEN BY THE LD.CIT(A) THAT SALE DEED OF ALL THE RESIDENTIAL UNITS WERE SUBMITTED TO THE AO WHICH CLEARLY MENTIONS THA T THE UNITS ARE COMPLETE IN ALL RESPECT. ONCE THE ASSESSEE COMPLETES THE BU ILDING IN ALL RESPECT HANDS OVER THE POSSESSION AND APPLIES FOR COMPLETION CERT IFICATE WELL BEFORE TIME THEN MERELY BECAUSE OF SOME DELAY IN PART OF THE LO CAL AUTHORITY FOR ISSUING THE COMPLETION CERTIFICATE LATE FOR NO FAULT ON THE PAR T OF THE ASSESSEE WILL NOT BE A GROUND TO DENY DEDUCTION U/S.80IB(10). THE FINDING GIVEN BY THE LD.CIT(A) COULD NOT BE CONTROVERTED BY THE LD. DEPARTMENTAL R EPRESENTATIVE. ITA NO.883/PN/2013 ACCORDINGLY THE ORDER OF THE CIT(A) ON THIS ISSUE IS ALSO UPHELD AND THE GRIEVANCE OF THE REVENUE IS DISMISSED. 7.6 SO FAR AS THE GRIEVANCE OF THE REVENUE THAT THE PAMPHLETS OF THE PROJECT SHOWS THE PLANNED INDEPENDENT BUNGALOW HAVING BUILT UP AREA OF 1752 SQ.FT. WE FIND IN THE A.Y. 2008-09 THE AO HAS ACCEPTED THE PLEA OF THE ASSESSEE THAT NONE OF THE UNITS ARE IN EXCESS OF TH E PRESCRIBED LIMIT. FURTHER THE SUBMISSION OF THE ASSESSEE THAT THE PLAN WAS NE VER IMPLEMENTED AND IN THE BUILDING PERMISSION PLAN NOT A SINGLE BUILDING HAS EXCEEDED THE PRESCRIBED LIMIT OF 1500 SQ.FT. COULD NOT BE CONTROVERTED BY T HE REVENUE. THE CERTIFICATE FROM THE MUNICIPAL COUNCIL CERTIFYING THAT THE BUIL DING WORK HAS BEEN DONE/CARRIED IN ACCORDANCE WITH THE BUILDING PERMIS SION AS GRANTED BY THE BHUSAWAL MUNICIPAL COUNCIL ALSO COULD NOT BE CONTRO VERTED BY THE LD. DEPARTMENTAL REPRESENTATIVE. UNDER THESE CIRCUMSTA NCES WE FIND NO INFIRMITY IN THE ORDER OF THE CIT(A) ON THIS ISSUE. IN THIS VIEW OF THE MATTER WE ARE OF THE CONSIDERED OPINION THAT THE CIT(A) WAS F ULLY AND LEGALLY JUSTIFIED IN ALLOWING THE CLAIM OF DEDUCTION U/S.80IB(10) AND TH E GROUND RAISED BY THE REVENUE IS ACCORDINGLY DISMISSED. 5. THE LD. DEPARTMENTAL REPRESENTATIVE HAS NOT DISP UTED THAT THE EARLIER ORDER OF THE TRIBUNAL DATED 30.09.2013 (SUPRA) COVE RS THE PRESENT CONTROVERSY. FOLLOWING THE SAID PRECEDENT IMPUGNED ORDER OF CIT (A) UPHOLDING THE CLAIM OF THE ASSESSEE DESERVES TO BE AFFIRMED. WE HOLD SO. 6. IN THE RESULT THE APPEAL OF THE REVENUE IS DISM ISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 26 TH NOVEMBER 2014. SD/- SD/- (R.S. PADVEKAR) (G.S. PANNU) JUDICIAL MEMBER ACCOUNTANT MEMBER PUNE DATED: 26 TH NOVEMBER 2014. SUJEET COPY OF THE ORDER IS FORWARDED TO : - 1) THE ASSESSEE; 2) THE DEPARTMENT; 3) THE CIT(A)-II NASHIK; 4) THE CIT-II NASHIK; 5) THE DR B BENCH I.T.A.T. PUNE; 6) GUARD FILE. BY ORDER //TRUE COPY// ASSISTANT REGISTRAR I.T.A.T. PUNE